Goodman Fielder Ltd., Australia and New Zealand’s largest baker, rejected a A$1.3 billion ($1.2 billion) offer from Wilmar International Ltd. and First Pacific Co., saying it “materially undervalues” the company.

Wilmar International Ltd. and First Pacific Co. raised their takeover offer for Goodman Fielder Ltd. by 7.7 percent to A$1.4 billion ($1.3 billion), and set a deadline of today for its board to recommend the deal.

Wilmar International Ltd., the world’s largest palm oil trader, bought a 10.1 percent stake in Goodman Fielder Ltd. and is studying whether to acquire more shares in Australia’s biggest baking company.